Tightest US Mortgage Lending Standards In Over A Decade
Despite rising household formations, a solid job market and record low interest rates homeownership rates in the US are at an all-time low. One factor contributing to lower home ownership rates is tighter lending standards. After being too quick to lend during the housing boom US banks have now gone to the other extreme.
According to data from the New York Federal Reserve 58% of new mortgages this year have been made to borrowers with credit scores of 760 and higher. These are the tightest lending standards in over a decade. See the following chart from National Bank: